Govt Misses IMF Deadline for New Gas Tariff Notification

Pakistan has missed an International Monetary Fund (IMF) deadline to notify revised gas tariffs, putting the government in technical breach of a key structural benchmark under the $7 billion Extended Fund Facility (EFF) as it struggles to tackle a Rs. 3.44 trillion circular debt in the gas sector.

The government was required to notify the semiannual gas tariff by July 1, 2026, under commitments made to the IMF to keep energy prices at cost recovery levels. The benchmark is one of 11 structural reforms introduced during the third review of the IMF program in April this year.

The delay was initially caused by legal uncertainty surrounding the appointment of Nabeel Ahmad Awan as Acting Chairman of the Oil and Gas Regulatory Authority (OGRA). Officials also cited volatile global energy prices and delays in finalizing the regulator’s revenue requirement determination for gas utilities

Officials said OGRA has now completed the procedural and legal requirements for determining the revenue needs of gas companies, including targets for reducing unaccounted for gas (UFG) losses. However, Awan reportedly withheld the notification after seeking station specific UFG reduction plans instead of broad annual targets previously used by gas utilities.

The government is working to reduce gas sector losses by improving system monitoring, strengthening enforcement, and upgrading aging infrastructure. Historically, UFG losses have remained between 9 percent and 14 percent, despite annual reduction commitments by gas distribution companies.

An official described the delay as a technical breach of the IMF benchmark, saying the missed deadline would be addressed through subsequent revenue adjustments. The official added that once OGRA issues its determination, the government intends to notify consumer gas tariffs without waiting for the full 40 day period allowed under the law.

Under the IMF program, Pakistan has committed to maintaining cost reflective energy tariffs to prevent further accumulation of circular debt. The government has also introduced a comprehensive gas circular debt monitoring dashboard and plans to roll out a new Circular Debt Management Plan during the current fiscal year to improve the sector’s financial sustainability.